Despite some familiarity in the name, Doge did not belong to the likes of Bitcoin, Ethereum, and other digital currencies. In fact, Doge was a meme-inspired cryptocurrency conceptualized in 2013 by software engineers Billy Markus and Jackson Palmer. Back then, the duo intended it as a joke on the cryptocurrency phenomena’s increasingly speculative economic model, involving assets with no inherent worth or utilitarian capabilities. However, everything changed after Elon Musk and former President Donald Trump casually endorsed the meme coin. Between December 2020 and January 2021, Doge’s price skyrocketed by more than one million percent! Remarkably, at its peak, Doge was the fourth most traded digital currency, ceding ground to Bitcoin, Ether, and Tether, the latter three representing less than one percent of its traded value. Now, according to an analysis in the NY Times, cryptocurrency-related contracts have been skyrocketing, with Doge climbing from an average of ten contracts to as high as 17000 since mid-January. The presiding circumstances behind this surge remain disputed. Though, according to NYU’s O’Connor School of Business cryptocurrency professor Hanna Halaburda, if the trend were to continue, Doge’s price could vastly dip soon, albeit preserving those contracts. She added that the trading in Doge was fueled by a niche cult phenomenon of caretakers attempting to increase Doge’s price to satiate their newly-minted billionaires, pleading: “Let’s speak separately about whether it is justified or delusional.” From another perspective, eToro’s senior analyst Mati Greenspan argued that the Doge-infatuation was a fundamental challenge for the conventional cryptocurrency market. He cautioned: “I think the mechanisms that are created for managing the safety of investment products are not going to be effective for Doge.” However, according to AJ Nelson, president of digital asset release at BlackRock, the industry’s largest non-public wealth manager, a meme-inspired crypto investment offered investors exposure to various elements of the cryptocurrency ecosystem, including derivatives contracts. Nonetheless, he also cautioned against the lofty adoption Doge has witnessed, warning, “The price of [derived] contracts is contingent on market factors more than other products.” The Doge phenomenon can be likened to the 1980s savings-and-loan craze, where small holders were reckless and misread market signals, boosting real estate prices and over-investing in derivatives contracts beyond what’s sustainable (Blangiardo, Cleri, Gong, & Petrović, 2021). Long term structural problems in the economy, promoted by greed-driven arrangements bred insolvency, consequently leading to a systemic crisis (Gategno, 2013). This crash-like outcome was a reverberation of the progressive attribute in any given economy’s downward trend and real-time price movements, given the market’s below-average volatility regulation.
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